IRC 6501

The United States District Court in Dawn D. Lagerkvist v. USA, 2024 WL 869548, N.D. Indiana, signed February 29, 2024, ruled in favor of the Government on its Motion for Summary Judgment and against the taxpayer’s argument that the statute of limitations for assessment of the Trust Fund Recovery Penalty (TFRP) had expired. In this case, upon application for a tax id number, the taxpayer advised the IRS that it was qualified to file a Form 944, rather than a Form 941 for its beginning tax year of 2012.  In reality, the taxpayer attempted to file a 1^st Quarter Form 941 in early 2012 that was rejected in a return letter by the IRS. The taxpayer was advised it must change its filing to 941’s by proper request, or file a timely Form 944 annually. The taxpayer did neither, but in this case argues that the statute of limitations for collection of the TFRP has expired.  The law in Section 6501 states that the IRS is required to assess a tax within 3 years after the return was filed. If the taxpayer fails to file a return, the IRS may assess the tax (TFRP in this instance) at any time.  In other words, no return, no statute on assessment. The taxpayer argued that there was a dispute as to whether or not she actually filed the returns because she provided employee testimony that all filings were handled the same way. She argued the attempted filing of the First Quarter 941, along with other documents, such as her filed 1120-S, W-2s and W-2, should be sufficient to meet her annual return filing requirements and therefore the TFRP assessment was untimely. For multiple reasons, and through several pages of analysis, the Court rejected this premise as not only undermining the statute, but also imposing an unworkable administrative burden on the IRS.